After draining its savings this year, Florida faces doubly difficult choices next year because of a tax structure that depends on population growth. The Miami Herald article says:
Lawmakers will likely be back budget-cutting and tax-raising again. The reason: Florida has a broken ''Ponzi scheme of financing government'' that relies on population growth to pay for government, said economist Sean Snaith. And with little or no population growth, the state's finances won't improve. And:
"Florida's tax structure is flawed fundamentally," said Snaith. And, as Carl Hiaasen once said:
"...the mechanism of (Florida's) economy is modeled on that of a cancer cell."
Totally reassuring.
2 comments:
This shows that until the State of Florida adopts a modern income tax structure that is more equitable and then balances this with an across-the-board lowering of property taxes, there will be no relief or tax justice in the State, or a stable source of revenue for the State and local governments. The legislatures are betting heavily on a return of population growth that will be driven driven and supported by growing house prices. The latter will not return for many years. Let's not forget, also, that many peoples' retirement incomes have disappeared with the stock market collapse and recession. Many fewer will come to Florida under these conditions no matter the subsidies for first time home purchase.
There would be no need for growth to fuel the budget if our government weren't so out of control. Florida's Public Employee Pension scheme is going to bankrupt this state and everyone living in it (except state employees).
Florida's pension system must be reformed, otherwise nobody but state and county employees will want to live here.
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